You guys started a conversation a few days back th
Post# of 15187
Posted On: 06/14/2016 6:25:36 PM
You guys started a conversation a few days back that cause the KBM ship of fools on IFLUB to have “mind excursion” flashbacks but failed to continue the topic. I want to bring it back up on topic.
The rules covering the timing of purchases around major developments within the company may cause HJOE to delay implementing it. HJOE should not conduct a program at all if there is any material inside information (financials, new products, conversions, settlements, etc.) that HJOE is aware of that has not been publicly disclosed. If HJOE knows the earnings but those earnings haven't been released, HJOE should not be out purchasing its stock. Many companies inform their brokers that they may be required to suspend on short notice purchases authorized as part of an ongoing repurchase program and apply the same "blackout period" forbidding all trades to corporate repurchases as they do for insider stock purchases by individuals. HJOE may decide not to trade during a period that extends from 10 days before through two days after any earnings release.
Assuming no pending developments prevent a buyback HJOE should state both a dollar or share purchase limit and a time frame—for example; $5 million over one year, 3% of shares outstanding over the next six months or a half million shares before year-end. HJOE should issue a press release detailing the program. Things start to get tricky at this stage because of the extensive regulations governing corporate share repurchases. The safest course of action is to follow the guidelines found in the 1934 act's Rule 10b-18—Purchases of Certain Equity Securities by the Issuer and Others.
Rule 10b-18 provides a safe harbor only for repurchases of common stock. Even though compliance with Rule 10b-18 isn't mandatory, it does reduce the potential for error in executing a buyback.
The idea is that there isn't the opportunity for market manipulation when HJOE is buying large blocks back. If such a large block were to be thrown into the open market, it would probably cause a supply and demand imbalance.
The rules covering the timing of purchases around major developments within the company may cause HJOE to delay implementing it. HJOE should not conduct a program at all if there is any material inside information (financials, new products, conversions, settlements, etc.) that HJOE is aware of that has not been publicly disclosed. If HJOE knows the earnings but those earnings haven't been released, HJOE should not be out purchasing its stock. Many companies inform their brokers that they may be required to suspend on short notice purchases authorized as part of an ongoing repurchase program and apply the same "blackout period" forbidding all trades to corporate repurchases as they do for insider stock purchases by individuals. HJOE may decide not to trade during a period that extends from 10 days before through two days after any earnings release.
Assuming no pending developments prevent a buyback HJOE should state both a dollar or share purchase limit and a time frame—for example; $5 million over one year, 3% of shares outstanding over the next six months or a half million shares before year-end. HJOE should issue a press release detailing the program. Things start to get tricky at this stage because of the extensive regulations governing corporate share repurchases. The safest course of action is to follow the guidelines found in the 1934 act's Rule 10b-18—Purchases of Certain Equity Securities by the Issuer and Others.
Rule 10b-18 provides a safe harbor only for repurchases of common stock. Even though compliance with Rule 10b-18 isn't mandatory, it does reduce the potential for error in executing a buyback.
The idea is that there isn't the opportunity for market manipulation when HJOE is buying large blocks back. If such a large block were to be thrown into the open market, it would probably cause a supply and demand imbalance.
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